The American Jobs Plan, Part One
As President Biden and congress begin to hash out their public infrastructure plan over the next few months, Bellevue Strategies will be sending you detailed breakdowns of each plan and updates on negotiations. This week, we will be focusing on the American Jobs Plan and the American Families Plan. President Biden is pushing for unprecedented federal funding to reshape our economy that will have potential implications for all clients. Please do not hesitate to reach out if you need further details.
I. The American Jobs Plan
President Biden’s first economic plan, entitled the American Jobs Plan (AJP), looks to spend $2.3 trillion in new federal funding on various forms of public infrastructure, research and development, affordable housing, clean energy, and the care economy. This plan is designed to promote longer-term economic recovery. In order to finance the AJP plan, President Biden introduced his Made in America Tax Plan, which outlines the revenue sources intended to pay for the proposal over the next 15 years. These proposals include corporate tax hikes (from 21 percent to 28 percent), new taxes on international commerce, and the repeal of the 2017 Trump tax cuts.
In order to pass this plan, Democrats have proposed using a reconciliation bill later this year. Although Democrats do not need the support of Republicans to pass this plan, due to their slim majority, any infrastructure bill must appeal to their entire conference, including conservatives like Senator Joe Manchin.
Detailed breakdown of The American Jobs Plan:
Transportation Infrastructure Investment Estimated at $621 billion
$115 billion investment for
Modernization of 20,000 miles of highways and roads
Provide repairs for the ten most economically significant bridges in the nation
Renovate the 10,000 bridges most in need of repair
$20 billion investment to improve road safety
One aspect of this investment will be the Safe Streets for All program which will fund state and local vision zero plans and other initiatives to reduce crashes and fatalities
$85 billion investment in public transportation
Replace thousands of buses and rail cars
Repair hundreds of stations
Expand transit and rail into new communities
$80 billion provided for passenger and freight rail service
All Amtrak to address its repair backlog
Improve existing rail corridors
Modernize the Northeast Corridor
Connect new city pairs
Enhance grant and loan programs that improve rail safety, efficiency, and electrification
$174 billion for the electric vehicle industry
Establish a grant and incentive programs for a national network of 500,000 electric vehicle chargers by 2030
Establish the Clean Buses for Kids Program with the EPA
Replace 50,000 diesel transit vehicles and electrify at least 20% of school buses
Continue the process of electrifying the federal fleet, particularly the USPS
$25 billion invested into modernizing the country’s airports
Funding for the Airport Improvements Program
Terminal renovations
Multimodal connectivity improvements
Improvement of FAA assets to ensure safety while flying
$17 billion to improve inland waterways, coastal ports, land ports of entry, and ferries
Healthy Ports program that will help emigrate the impacts of air pollution on neighborhoods near ports
$20 billion to ensure that communities historically disadvantaged by transportation investments will receive proper investment
$25 billion to establish a new funding stream for transportation projects that have tangible benefits to the regional or national economy but are too large or complex for existing funding programs
$50 billion dedicated to investments to improve infrastructure resilience
An investment in essential services, such as the electric grid, food systems, urban infrastructure, community health and hospitals, roads, rails, and other assets
The strengthening of natural resource infrastructure such as protecting forests from extreme wildfires, strengthening coastal resilience to the rise in sea level and hurricanes, the improvements of major land and water resources, and the investment in water efficiency and recycling programs
Clean Drinking Water, Renewed Electric Grid, and High Speed Broadband
$45 billion investment in the EPA’s Drinking Water State Revolving Fund and in the Water Infrastructure Improvements for the Nation Act grants
This investment will fund the elimination of all lead pipes and services lines for drinking water
$56 billion in grants and low-cost flexible loans to modernize the nation’s water systems
$10 billion to monitor and remediate perfluoroalkyl and polyfluoroalkyl substances in drinking water
$100 billion to bring affordable high-speed broadband to every American
Lift barriers on municipal broadband, affiliated providers, and rural electric co-ops
Require internet providers to clearly disclose the prices they charge
President Biden will work with COngress to find a solution to reduce internet prices for all Americans
$100 billion to be invested in the country’s power infrastructure
Electric transmission systems
Establish a targeted investment tax credit that incentivizes the buildout of at least 20 gigawatts of high-voltage capacity power lines
Establish the Grid Deployment Authority at the Department of Energy in order to better leverage existing rights-of-way and to support creative financing tools
Clean electricity
Provide a ten-year extension and phase down of an expanded direct-pay investment tax credit and production tax credit for clean energy generation and storage
Establish the Energy Efficiency and Clean Electricity Standard (EECES) aimed at cutting electricity bills and electricity pollution, increasing competition in the market, incentivizing more efficient use of existing infrastructure, and continuing to leverage the carbon pollution-free energy provided by existing sources like nuclear and hydropower
$16 billion set aside to cap hundreds of thousands of orphan oil and gas wells, in addition to sealing abandoned mines
$15 billion investment to remediate Brownfield and Superfund sites
$10 billion to establish the Civilian Climate Corps
The Corps will put a new, diverse generation of Americans to work conserving public lands and waters, in addition to bolstering community resilience, and promoting environmental justice
Build, Preserve, and Retrofit Houses, Commercial Buildings, Schools, and Other Structures
In order to address the housing crisis, $213 billion will be invested in housing stock
Through a variety of methods, such as tax credits, formula funding, grants, and project-based rental assistance, the American Jobs Plan will ensure that individuals in underserved communities
President Biden is calling upon Congress to pass the Neighborhood Homes Investment Act (NHIA) which would offer $20 billion worth of tax credits over the course of five years for homes to be either built or rehabilitated
President Biden is also calling upon Congress to create grant programs and funding opportunities for localities that eliminate exclusionary zoning practices
President Biden is requesting that Congress invest $40 billion in order to improve America’s public housing system
Home will be able to upgrade and modernize through block grant programs, the Weatherization Assistance Program, and tax cuts
Through the establishment of the Clean Energy and Sustainability Accelerator, $27 billion will used to mobilize private investment into distributed energy resources; retrofits of residential, commercial and municipal buildings; and clean transportation
$100 billion to modernize public schools and ensure they are safe and healthy facilities
$50 billion will be provided in direct grants
$50 billion will be leveraged through bonds
President Biden will request that Congress allocate $12 billion to address the needs of community colleges across the nation
Improvements will focus on facilities improvement and technological investments
President Biden will request that Congress provide $25 billion to help improve child care facilities
This funding will be allocated through a Child Care Growth and Innovation Fund
Additionally President Biden will request an expanded tax credit for businesses to build child care facilities at the workplace
The tax credit will amount to 50% of the first million spent on construction costs
$18 billion for the modernization of the Vetran Affairs hospitals and clinics
$10 billion for the modernization, sustainability, and resilience of federal buildings
Caregiving Improvements
Expanded access to home and community-based services (HCBS)
This expansion of HCBS under Medicaid is expected to provide well-paying jobs that provide benefits and the opportunity for employees to collectively bargain
Extension of the Money Follows the Person program
Investment in Research and Development
In total a $180 billion investment
President Biden requests Congress delegate $50 billion to the National Science Foundation (NSF) in order to collaborate with and build upon existing governmental programs
The president also requests that Congress provide $30 billion of funding for research and development specifically tailored to innovations and job creation for rural America
President Biden is calling on COngress to invest a further $40 billion into climate science research and $15 billion in climate research and development priorities
President Biden is calling on Congress to make a $10 billion investment for research and development at HBCUs and other MSIs
He also is calling on Congress to invest $15 billion in creating up to 200 centers of excellence that will serve as research incubators at HBCUs and other MSIs
Manufacturing and Small Business
$50 billion requested to create a new office at the Department of Commerce that will monitor domestic industrial capacity
An additional $50 billion is requested for semiconductor research and manufacturing
$30 billion over 4 years to create new jobs in medical countermeasures manufacturing, research and development, and biopreparedness/biosecurity
President Biden requests that Congress enable a $46 billion investment through federal purchases of electric products, such as cars and heat pumps, that will further his vision for net-zero emissions by 2050
President Biden is also requesting Congress invest $20 billion in regional innovation hubs and a Community Revitalization Fund
An additional $14 billion is requested for NIST to combine industry, academia, and government
$52 billion is requested to be invested in domestic manufacturing
This funding would be provided through proven capital access programs
President Biden is requesting Congress allocate $31 billion in programs that provide small businesses access to credit, venture capital, and R&D funding
$5 billion is requested to establish a new Rural Partnership Program that will help rural regions build on their vision for an inclusive community and economic development
Workforce Development
President Biden requests an investment of $100 billion in proven workforce development programs that are targeted at underserved communities
$40 billion in a new Dislocated Workers Program and sector-based training
This will provide job training for workers who have lost their job through no fault of their own
The sector-based training will focus on high demand job sectors, such as clean energy, manufacturing, and caregiving
$12 billion is requested to specifically transition underserved communities into the developing economy
$5 billion is requested to be used of eight years to support evidence-based community violence prevention programs
$48 billion requested for workforce development infrastructure and worker protection
This includes registered apprenticeships, pre-apprenticeships, career pathway programs in middle and high schools, and technical programs that connect underrepresented students to STEM and other in-demand sectors through partnerships with higher education and employers
Support for Unions and Workers
The American Jobs plan encourages Congress to pass the Protecting the Right to Organize Act
President Biden is also requesting increased penalties when employers violate workplace safety and health rules
The Made in America Tax Plan
The Corporate Tax Rate would be set at 28%
There would be an increase the minimum tax on U.S. corporations to 21% and ensure that tax havens cannot be used to shield profits
President Biden would eliminate the rule that allows U.S. companies to pay zero taxes on the first 10 percent of return when they locate investments in foreign countries
President Biden also seeks to make it more difficult for a domestic corporation to merge with a foreign corporation, while keeping their domestic corporate structure in place, in order to avoid U.S. taxes
The tax reform will eliminate the write offs that have been permitted previously for companies offshoring jobs, rather the Biden administration seeks to provide tax credits for the onshoring of jobs
President Biden will also attempt to bring and end to the tax breaks associated with Foreign Derived Intangible Income, which would provide a tax break for moving assets abroad
The tax reform will also ensure that large, profitable corporations will not be able to exploit loopholes in the tax code without paying U.S. corporate taxes
The tax reforms, in reflecting President Biden’s commitment for net-zero emissions by 2050, will eliminate any subsidies, loopholes, and special foreign tax credits for the fossil fuel industry
Furthermore, the President is proposing to restore payments from polluters into the Superfund Trust Fund in order for polluting industries to pay for the cost of cleanups
In order to best enforce the tax code, President Biden will ensure that the IRS has the necessary funding to do so.